Cattle on Feed Report: Placements Lighter Than Expected

Traders were anticipating a sharp drop in the number of calves placed into feedlots in September, but the figure came in even lighter than expected at just 81% of year-ago. That pulled the On Feed number 3% below year-ago despite Marketings coming in lower than anticipated. In all, this data should trigger bear spreading with deferred futures gaining faster than nearby contracts.

COF Report

USDA

Average

Range

% of year-ago levels

On Feed

97

97.8

96.8-98.7

Placements

81

85.0

81.0-89.7

Marketings

88

89.8

88.8-92.8

The weight breakdown of September Placements shows: Lightweights down 24.8%; 6-weights down 14.5%; 7-weights down 11.9%; and heavyweights down 20.2%. This data reflects overall tightening calf numbers and the fact many cow-calf operators have already aggressively moved calves due to poor pasture conditions. In particular, the sharp drop in heavyweight calf placements reflects tighter supplies as heavy animals should be the first choice among feedlot operators given high feed prices.